The Purdue University/CME Group Ag Economy Barometer declined moderately in December to 127, which was 7 points below the index's value one month earlier and 9 points below October's reading. The December 2018 barometer was virtually
unchanged from December 2017 when the barometer stood at 126.

This month's decline in the Ag Economy Barometer occurred because producers' perceptions of current conditions and their expectations for the future both drifted lower this month compared to November. The Index of Current Conditions declined
six points this month to 109 and the Index of Future Expectations fell to 135 compared to 143 in November. It should be noted that this month's survey was completed before President Trump signed the Agricultural Improvement Act of 2018 (2018
Farm Bill) into law so it remains to be seen what impact, if any, passage of that legislation has on U.S. farmer sentiment.

Compared to a year earlier, an interesting shift in producer perceptions has taken place regarding both current conditions and future expectations. The December 2018 Index of Current Conditions was substantially below a year earlier, registering a
year-to-year decline of 30 points. In contrast, the Index of Future Expectations was actually 15 points higher in December 2018 than in December 2017.

This divergence in perceptions has been especially notable since last spring as producers continue to exhibit more confidence in future conditions for their farms in the face of weakening perceptions regarding current economic conditions.

Producers interest in making large investments in their farm operations waned somewhat in December as the Large Farm Investment Index fell to a reading of 51, five points below a month earlier but still 9 points higher than in September, when it
reached its lowest reading of the last three years. The investment index remains well below a year ago, when it reached a reading of 70, suggesting farmers are wary of making substantial farm investments given current financial conditions on their
farms.